00:00:00 ◼ ► Welcome to Under the Radar, a show about independent iOS app development. I'm Marco Arment.
00:00:05 ◼ ► And I'm David Smith. Under the Radar is usually not longer than 30 minutes, so let's get started.
00:00:12 ◼ ► Yeah, we should do some really deep technical, unrelated to the day's news episode that's purely dry and technical.
00:00:27 ◼ ► I probably not, but yes, clearly that is not what we're going to talk about because this last week has seen one of, I mean, you and I have both been doing this for, I don't know, 17 years or something like that.
00:00:40 ◼ ► Yes, we've been iOS app developers as long as anybody has been iOS app developers except people inside of Apple and maybe Icon Factory.
00:00:47 ◼ ► Sure. I mean, we've been doing this since 2008, I think it is, like when I started doing this kind of stuff.
00:00:53 ◼ ► And it's like, it seems like last week there was a big, you know, the thing we're dancing around is the injunction against Apple regarding their anti-steering provisions in the Epic case that has been dragging on for, oh gosh, what is it, like five years now?
00:01:10 ◼ ► But anyway, like Apple had an injunction that said they had to open up outside external payment methods to U.S. storefront apps, which is huge and is meaningful and is dramatic.
00:01:23 ◼ ► And it is this big thing that is, you know, the culmination, and probably the culmination is maybe the wrong word because I doubt this is the end.
00:01:33 ◼ ► Yeah, but it is, it is potentially, it is certainly a pivotal moment in this whole thing.
00:01:37 ◼ ► It is something is materially different now because against their wishes, Apple has been forced to do the thing that previously they didn't want to do and said was impossible to do or impractical or, you know, all kinds of things that, for whatever, all those reasons for the last 17 years, they've chosen not to do this path, go down this path, to be very strict and locked down in the way that payment processing is done within apps.
00:02:07 ◼ ► Like there are apps in the app store now that have third-party payment processing, and that is a thing that exists.
00:02:18 ◼ ► But like the thing when I was thinking about preparing for this episode, yeah, because obviously this is what we're going to talk about this week, because as independent iOS app developers, this is a meaningful, like pivotal change in the business that we run.
00:02:31 ◼ ► And the way we run it, and the options that are available to us, and what's going to be happening with our competitors, and all kinds of things like that.
00:02:40 ◼ ► But I think the reality of a show like this, and I think a show, you know, like I think under the radar over the last 10 years that we've been doing this, I try to have steered us towards the kind of constructive, not in deep in the weeds, but just constructively moving the conversation forward.
00:03:00 ◼ ► And trying to take the perspective of, you know, to people who've been doing this about as long as you can do it, to talk about how did we get here, where can we go from here?
00:03:09 ◼ ► Like what is the constructive steps to look back at what brought, you know, why did this thing ultimately have to be done via a judge's order in an injunction to a kid, you know, a five-year-old case, rather than being something that was an active choice that Apple made?
00:03:24 ◼ ► And then maybe even on the more positive side, it's like, what positive outcomes could this bring?
00:03:30 ◼ ► You know, what are the, what could we see come out of this that's good and hopeful and encouraging to our business?
00:03:36 ◼ ► Because it's like the reality is, as an app developer, I, I don't want to think about this, like, as much as we were joking at the beginning, like, I would rather have under the radar be talking about property wrappers and scene kit, and technical things that are the actual job that I want to do, like the job that you and I, we got into this business, because we like making apps.
00:03:56 ◼ ► And I think particularly, we were attracted, you know, in terms of having, you know, you're my friend, my friendship is that we both want to make excellent apps, I think we both strive towards making good, wonderful apps that, you know, solve problems in interesting ways and are encouraging.
00:04:13 ◼ ► Like, I don't want to be thinking about, you know, courtroom dramas, like, that's not the life that I want for myself, I want to make things, I want to put this behind me and be able to focus on this.
00:04:23 ◼ ► But, unfortunately, that perspective, and that thing that I've been sort of, I've been reluctantly pulled out of, is it doesn't seem possible right now.
00:04:32 ◼ ► Like, there is this massive distraction, this big drama that is happening, that unfortunately, you know, app developers are right in the middle of.
00:04:39 ◼ ► And there are parts of this that are well sort of, like, well outside of our remit and our range where, you know, it's like these big titans clashing about these issues.
00:04:49 ◼ ► And that feels awkward, because I, you know, don't want to catch a stray in the middle of that.
00:04:59 ◼ ► And I think at its core, like, the thing that's been really frustrating to me is, I think, and we talked about this, you know, a couple episodes ago, where our changing relationship with Apple, which is about a slightly different aspect, but a similar kind of thing.
00:05:12 ◼ ► And I think there's this general feeling that I've been having, where I just wish that Apple would view developers as their customers.
00:05:22 ◼ ► And that's a funny way to say it, but it's a thing that has really just been sticking in my head.
00:05:27 ◼ ► And that is so much of this problem, I think, comes from the complicated, difficult, challenging relationship that we as developers have with Apple, is that while we pay them, you know, large amounts of money every month, I don't think they view us as their customer.
00:05:44 ◼ ► That they're not providing a service that we're buying, that we are just a resource to be extracted from, and a commodity resource at that, that they don't need to try and win our customer.
00:06:07 ◼ ► Like, obviously, they've been doing this, they've been having this posture and this approach and this view for us for 17 years, to some degree, and it has worked out for them.
00:06:16 ◼ ► But there are consequences for them having that perspective, for them treating us as not a customer to be served.
00:06:23 ◼ ► Because the thing that I love, like, I love about Apple, and the thing that it grew me to being an Apple developer, you know, rather than an Android developer, for example, is that I think Apple's ethos, certainly 17 years ago, and to some degree now, is that, you know, their goal was to make exquisite products that delight their customers, that serve them above and beyond the minimum.
00:06:46 ◼ ► And by doing that, they're creating an environment where their products maybe cost a bit more, but are worth it, and are worth the extra.
00:06:56 ◼ ► And so if I'm not one of their customers, then they're not serving me, and they're not at their best, sort of, is the logical conclusion of that line of thinking.
00:07:05 ◼ ► And I think that's where so much of this comes from, this perspective that they have, that they have to fight every little thing that is trying to take something from them in their view.
00:07:14 ◼ ► That a developer is coming in and, you know, taking something from Apple, rather than Apple providing products and services that developers are scrambling to use and to buy, and to, in doing so, help out their other group of customers, their end users, the people whose apps, you know, are being, you know, we're making and then customers are using, and they want them to have the best experience.
00:07:41 ◼ ► And I think you can imagine a world, and maybe this is just me being an idealist, but I can imagine a world where if Apple is serving both its end users as well as its developers and treating them both with respect and with a desire to serve well, that everyone wins.
00:08:07 ◼ ► And like, you can imagine this sort of threefold victory where everyone, everyone is happy.
00:08:11 ◼ ► But I think that would take change on Apple's part, because clearly right now, like reading through the injunction, which is something I never wanted to get into talking about, like the parts of this job that I did not expect that I'd be reading, like 70 page, you know, legalese from district court judges.
00:08:30 ◼ ► And I think the discussions that you have in the kind of minutes of meetings and stuff, like show that in a way.
00:08:36 ◼ ► And obviously, I know that like the injunction is written to give a certain perspective.
00:08:41 ◼ ► And, you know, these minutes are not complete and representative of all the discussions within Apple.
00:08:47 ◼ ► But they are certainly indicative that there are meetings happening at very high levels where the posture and perspective that Apple has is how can we hold on to everything we possibly can, not give an inch, and squeeze developers as much as possible.
00:09:05 ◼ ► Like, what can we get away with is the perspective that they seem to have had in a lot of these discussions.
00:09:27 ◼ ► And I hope, in many ways, that this difficult, awkward, complicated thing that is, you know, sort of this bomb that's gone off in our community is hopefully the moment where that changes.
00:09:39 ◼ ► Like, because Apple was forced to do this thing they didn't want to do, like, hopefully the outcome is that they decide and see that, like, look, we can keep fighting this battle forever or we can maybe come to a better place.
00:09:51 ◼ ► And I don't know how hopeful I am that that's the outcome, but, like, the part of me that is an idealist and wants to just get back to making cool things and building great stuff and in four weeks is going to WBC looking forward to, like, a summer of, you know, hopefully exciting and interesting work.
00:10:09 ◼ ► I want to just focus on that part of my job and, you know, be served as a customer and somebody feel valued in a way that, you know, I don't really feel that way right now.
00:10:29 ◼ ► I think we can see what has happened with Apple and various regulatory and legal requirements they've been forced to comply with in the rest of the world over the last few years.
00:10:39 ◼ ► And I think we can see, like, exactly what they're going to do, which is they're going to comply as little as possible.
00:10:45 ◼ ► They're going to fight every single thing, tooth and nail, and if they remain having lost the battle, it will only be a carve-out for that country and not the rest of the world.
00:10:57 ◼ ► I think if we are hoping for some kind of big change of heart where Tim Cook says, you know what?
00:11:04 ◼ ► Let's just make everything the same everywhere and be a little bit more reasonable in certain points.
00:11:12 ◼ ► But I've been thinking recently, I've been thinking about making a blog post, but I probably shouldn't.
00:11:17 ◼ ► Famously, when Steve Jobs was at the end of his life and he was kind of handing things over to Tim Cook, he told Tim Cook, don't worry about what I would do.
00:11:45 ◼ ► I mean, he was here for the beginning of the App Store with 30% and everything, and he thought that was a sweet deal.
00:11:52 ◼ ► He was all about how great that was compared to other mobile phone software environments and everything and retail.
00:12:01 ◼ ► So Steve Jobs was shamelessly greedy and would do it with a big grin on his face, and everybody would complain, but we'd go along with it.
00:12:20 ◼ ► Many people take a strictly cynically kind of shareholder financial view of what is right for Apple is to make as much money as possible, however you possibly can.
00:12:32 ◼ ► And if you look at the financial analyst perspective, for a company that makes a bunch of pretty mature hardware platforms that don't have very exciting growth in them anymore,
00:12:44 ◼ ► this services category, which I maintain is a misnomer and it really should be called fees, this fees category is their fastest growing and probably one of the only consistently growing categories of their revenue.
00:12:58 ◼ ► So you might argue that what is right, quote, right for Apple is to keep extracting as much as they can.
00:13:05 ◼ ► But as with many kind of Wall Street financial views of what companies should do, that is, I think, a limited and short-sighted view that does not fully understand the dynamics of hardware and software platforms.
00:13:23 ◼ ► And unfortunately, what I see from, you know, many years now of Tim Cook saying things in public, saying things in court, various things that are discovered during court discovery and revealed to the public, what we keep seeing is that at the very top, I keep seeing that kind of thinking from Apple where it seems like they don't fully understand the long-term health dynamics of running hardware and software platforms.
00:13:50 ◼ ► And that's not to say that no one in the company does, but I think there's enough people at the top who show a concerning lack of that judgment that I'm worried.
00:13:57 ◼ ► And that's why I've been so critical of Apple these past few years in this area because I'm concerned.
00:14:03 ◼ ► You know, when you have a company that has basically declared war on everyone, that's not going to go very well.
00:14:13 ◼ ► Look at, you know, throughout history, look at various ways that people have tried to fight every battle all at once.
00:14:31 ◼ ► It's somebody who said, like, regarding, like, Bill Gates, they said, like, if he came over to dinner at your house, he would say, I'll have all the mashed potatoes.
00:14:38 ◼ ► I think about that a lot because it seems like that's that is the Apple way with with this area of like, we'll take it all.
00:14:47 ◼ ► And at every single opportunity when they have been challenged by either, you know, governments, regulators, courts or just kind of common decency or common sense or, you know, maybe prioritization, every single time when they're challenged, their answer has been, we're going to keep taking it all 100 percent.
00:15:10 ◼ ► And while that is probably fine short term for the financials and everything, that does corrode a lot of a lot of major factors inside that are kind of hard to quantify in the short term.
00:15:27 ◼ ► And I think what they what they seem to think, they seem to only think about what this is, how this is affecting, like, major companies like Spotify or Amazon.
00:15:41 ◼ ► And there are huge parts of the developer community that Apple at those high levels doesn't really seem to think about their implications on.
00:15:50 ◼ ► You know, there are huge businesses that just can't even exist in the current, you know, in-app purchase ecosystem.
00:15:57 ◼ ► There are huge swaths of people who would build for Apple's platforms, but are just kind of discouraged or, you know, jaded by their attitude in a lot of these areas.
00:16:06 ◼ ► There are platforms that Apple tries to launch, like the Vision Pro, that seem to have trouble getting off the ground because the big companies who make really important apps for it all have all kind of said, you know what, screw you, Apple.
00:16:20 ◼ ► Because Apple has, over the last, you know, decade, just waged war on everyone else around them in the ecosystem and in the world.
00:16:28 ◼ ► Again, it's been great for their profits short term, but now we have a company that is relying almost completely on the services revenue for a lot of their, like, you know, financial story here.
00:16:40 ◼ ► Because all that hardware that they keep trying to make and sell, like, I don't think it's doing as well as it could.
00:16:51 ◼ ► And it seems like they don't see the need for that or at least don't understand how to do that.
00:16:59 ◼ ► And so it is kind of worth thinking, like, you know, what, again, going back to our changing relationship with Apple, like, what is our role here?
00:17:11 ◼ ► First of all, you know, as I said on ATP, do not build a business relying on this in-app purchase injunction because I guarantee you that it's not going to be an easy ride.
00:17:22 ◼ ► I would enjoy this in the short term if you can, but I would not count on this lasting.
00:17:32 ◼ ► And I've also I've heard the sentiment many times like, oh, now that now that the doors open, they will be forced to keep it open.
00:17:41 ◼ ► The moment they can close that gate, they will let that gate slam shut no matter who is under it.
00:17:53 ◼ ► The second they don't have to do this anymore, they will slam that door shut and everybody will have to take out all this functionality.
00:18:30 ◼ ► Apple does not do well when they when they get complacent in areas that they don't have to compete.
00:18:41 ◼ ► But I also think like this would be a good opportunity for Apple to get really honest with itself about what value they are providing to us.
00:18:58 ◼ ► And that is a really dysfunctional and toxic dynamic and also a factually incorrect one that, again, at the high levels, they don't seem to value the value of our software that we make for their platform in any way.
00:19:16 ◼ ► Like I know there are again, there are other people in the company who are smarter about this and who do appreciate that.
00:19:24 ◼ ► They don't see the value of having software on the platform if they're not directly making fees from that software.
00:19:38 ◼ ► If that was, say, a boss or a parent, we would have a lot of different terms for that kind of relationship and that kind of personality.
00:19:44 ◼ ► Number one, I hope they at some point develop an appreciation for the value of software on their platform beyond the direct fees.
00:20:01 ◼ ► That will take generational turnover in the top leadership before that has ever – before they even has a chance of being understood.
00:20:11 ◼ ► But in the meantime, I hope maybe they can look at – going back to what you were saying in the beginning, Dave, of like developers are customers too.
00:20:22 ◼ ► So I wonder if maybe they can revisit – if they're going to keep charging these very high rates as much as they possibly can, what value are they giving us?
00:20:42 ◼ ► Even without the IAP ruling, the rest of the web has developed really easy payments now.
00:20:47 ◼ ► You go to check out on something that has like ShopPay or StripeLink, like it's really easy and just as fast as Apple Pay and just as fast as IAP.
00:20:57 ◼ ► At the beginning, we also derived a lot of value from just the built-in kind of promotional possibilities in the app store, that there weren't that many apps yet.
00:21:18 ◼ ► The value of us being in the app store, it used to be that we would get a lot of promotional value from that.
00:21:26 ◼ ► And these days, you basically have to pay Apple more money through search ads to get any visibility whatsoever and to get any kind of download.
00:21:43 ◼ ► If they're going to justify these costs, they need to find other areas that they can say, we are providing you a lot of value.
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00:23:06 ◼ ► What you're saying in the sense of like you don't expect change to happen outside of sort of generational turnover type of a thing.
00:23:23 ◼ ► And I am fully accepting that that is sort of like a willful ignorance in a certain way that the perspective I have is because I want there to be change.
00:23:36 ◼ ► But at the same time, that's the perspective that I think improves my, you know, my mental health and well-being by sort of continuing to have hold on to some form of optimism.
00:23:47 ◼ ► And I think it's things like scenarios like what, you know, just happened with this big injunction that give me the hope for just like inside of Apple.
00:23:57 ◼ ► I know there are decisions and situations where there are two sort of two or two parts within Apple that are fighting about something.
00:24:09 ◼ ► There are two groups that are have a difference of opinion and one of them is winning out.
00:24:13 ◼ ► And my hope is in some ways that like the thing that gives me some amount of hope that maybe there would be change without kind of a generational turnover is that at some point things like this will change a decision that was 60-40 to 60-40 the other way around or even just 51-49 in the way of like change.
00:24:29 ◼ ► And it potentially doesn't need to be that they're going from, you know, 100-0 to all the way to the other side.
00:24:36 ◼ ► Like it could be a more incremental change that at some point reaches a tipping point and has a change.
00:24:41 ◼ ► And like I said, I completely accept that I am being sort of willfully naive in some ways in holding on to that hope.
00:24:48 ◼ ► But that's what helps keep me motivated and encouraged and sort of fights against the negative feelings that we've been having to navigate these last few months as developers because, you know, I don't love those feelings.
00:25:03 ◼ ► Like I want to forget about this and I want to, yeah, like feel valued in a way that like the thing that is sometimes frustrating and funny about like the services narrative, say, like or the fees narrative, like you were saying.
00:25:16 ◼ ► The thing that's funny to me about that is functionally what that means is the fastest growing area or like one of the last areas of growth in Apple's business is the amount that developers pay them.
00:25:32 ◼ ► Like that customer that they're like, we're the customer buying the services they provide on the app store.
00:25:41 ◼ ► Like obviously you can frame it in all kinds of ways that they're getting a cut of something else.
00:25:58 ◼ ► Like that is the biggest area of growth that Apple has and has been for a while and is their core growth narrative to the core financials of the business is developers paying them more money over time, right?
00:26:11 ◼ ► Like that is and functionally what's like problematic and this is the part of it that in the optimist part of me gives some hope is that ultimately if that starts to become at risk and Apple changes to a perspective of, well, how can we grow that, right?
00:26:27 ◼ ► How can we and the path they have been continuing to take is the like intransigent strong arm version of that.
00:26:35 ◼ ► I think another path would be to say like rather than having a big percent of a small number, why don't we have a smaller percent of a bigger number?
00:26:41 ◼ ► Like that is certainly something that is open to them that, you know, the companies who completely have sidestepped all the in-app purchase stuff and left the app store in that way and don't do any of their payment processing through Apple.
00:26:56 ◼ ► Like if Apple provided a competitive option that they took a commensurate kind of like fee into that like their costs are not going to be the same as what Stripe, you know, charges for just like raw credit card processing fees.
00:27:09 ◼ ► It's a reasonable thing that deals with the fraud and compliance and all the things that go on to that and potentially the convenience fee because it's built into the platform.
00:27:18 ◼ ► There's some thing that they could offer that was competitive and reasonably priced all of like there are I'm sure there are people who would then sign up for and start to use that and there would be a new market for these kinds of fees, whether that's the same or bigger or smaller.
00:27:33 ◼ ► I'm not the CFO, but I certainly know that what they may end up with for the path that they're on right now seems like they may end up with, you know, a big percent of no number because it's been their ability to do that is being taken away from them.
00:27:48 ◼ ► By legislation and injunction and injunction and so the hope that I have is that at some point they'll realize like let's stop fighting our biggest customers who is our largest growth area right now within our financials and let's take care of them.
00:28:02 ◼ ► Let's make their experience better and better and encourage a positive, beneficial, wonderful relationship that has growth that isn't just ossified out of, you know, a historical monopolistic perspective that they have.
00:28:16 ◼ ► That is something that developers are flocking to their platform because that's a great place to make a business and to be sustainable and awesome.
00:28:24 ◼ ► I know I'm naive in thinking that, but that's what, you know, that's what keeps me opening Xcode is the hope that one day that will change.
00:28:32 ◼ ► And hopefully an event like this injunction is a step, you know, sort of like something, you know, a stone being put on the other side of the scale that maybe is a tipping point and maybe is a thing that will get that sort of change sooner rather than later.
00:28:44 ◼ ► And I, you know, I hope I'm, my, my, my optimism is more right than your pessimism in this, in this case, but I mean, time will tell.